Photo Credit: Chris Stermitz from Pixabay 

According to a recent market report, the global cloud storage market is projected to grow from $76.43 billion in 2021 to $390.33 billion in 2028, translating to an annualized growth rate of over 26% during the forecast period. Backblaze is a leading player in the market that recently went public.

Backblaze’s Offerings

Founded in 2007 by Gleb Budman and Tim Nufire, San Mateo-based Backblaze is an online backup storage solution that uses AES encryption, data compression, and bandwidth throttling to back up data automatically, manually, when the computer is idle, or on an hourly schedule. The idea behind Backblaze came to Gleb when a former CTO of his earlier entrepreneurial venture, Mail Frontier, reached out to him to talk about backup-related issues. They noticed that back in the day people were not usually backing up their data even when everything was going digital. The two joined hands to build an offering that would help address this gap.

While building the solution they also realized that while building a product was important, it was equally important to convince the people to actually use the product to back up their data. They explored several backup options, for instance, making better software for people to back up to external hard drives, peer-to-peer backup, and many more. But they found that people did not really back up their data because it was difficult for them to identify what to backup. To address that problem, Backblaze decided to allow users to back up everything. They decided to build an unlimited backup service.

Backblaze also expanded its service to include B2 Cloud Storage that provides customers with direct access to its Storage Cloud to store, use, and protect data. Users can access the platform through industry standard and native APIs, SDKs, its web interface, or hundreds of third-party integrations. The wide range of options for accessing B2 Cloud Storage has made it easier for anyone to use the storage and seamlessly integrate storage capabilities into their technology stack.

Today, Backblaze Storage Cloud is the core platform for its cloud services. The storage cloud organizes, safeguards, and keeps over 500 billion files on demand and is designed to store trillions more in the future. With its interfaces, customers have the ability to upload, manage, safeguard, build upon, and utilize their data, while avoiding financial and logistical hurdles as well as the complexity of administering diversified cloud solutions.

Backblaze competes with big players like AWS, Azure, GCP, and Alibaba, along with other niche players like Druva and Carbonite. Backblaze competes with the bigger players by providing a significantly discounted service. Data storage from the B2 service costs 76% less than AWS’ S3 storage service, with 80% less expensive data download fees. Despite the lower price, Backblaze is able to deliver these products at a gross margin of 50%, versus Amazon S3’s low 50s. The pricing advantage has helped it win customers such as American Public Television, the nonprofit Gladstone Institutes, and California’s Kings County.

Backblaze’s Financials

When Backblaze launched its product, it was priced at $5 a month. But despite the small price, within a year, the product had recorded $35,000 in revenues. The company hasn’t stopped growing since. For years ended December 2019 and 2020, its revenues were $40.7 million and $53.8 million, respectively. For the same period, net losses were $1.0 million and $6.6 million, respectively.

Backblaze recently reported its fourth-quarter earnings. Q4 revenues grew 28% to $18.7 million and the loss was $0.38 per share, compared to a loss of $0.18 per share in 2020.

B2 Cloud Storage revenues grew 56% to $6.6 million. Computer Backup revenue grew 16% to $11.9 million. Its ARR grew 27% to $75.4 million.

For the fiscal year, Backblaze’s revenues grew 25% to $67.5 million and the loss per share was $1.07.

The company went public in November 2021 at a valuation of $468.4 billion and a list price of $16 per share. Its stock is currently trading at $11.1 with a market capitalization of $337.2 million. Prior to going public, Backblaze had raised $5.3 million in three rounds of funding led by TMT Investments and Ulrich Gall. Its most recent round of funding was held in July 2012, where it raised $5 million.